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ADM Reports Record Second Quarter Earnings per Share of $1.26, $1.33 on an Adjusted Basis; Expects Momentum to Continue in Second Half, Leading to Very Strong Full-Year Outlook

• Q2 net earnings of $712 million; adjusted net earnings of $754 million
• Segment operating profit up more than 40%
• ROIC of 9.7%, significantly higher than the prior-year period’s 8.1%
• 27% year-over-year Q2 operating profit growth in Nutrition, raising segment’s OP growth expectations for full year to 20%

CHICAGO–(BUSINESS WIRE)–
ADM (NYSE: ADM) today reported financial results for the quarter ended June 30, 2021.

“It was yet another excellent quarter for ADM, as our team delivered record earnings, with strong year-over-year profit growth across all three business units,” said Chairman and CEO Juan Luciano.

“This is a very different ADM than even a few short years ago, and our transformation is far from over. Our productivity efforts are powering our execution, and — combined with our unparalleled global footprint and strong risk management — supported outstanding results in both Ag Services & Oilseeds and Carbohydrate Solutions. And we’re driving innovation, which helped support record top-line and bottom-line results in Nutrition; in fact, we are now raising our expectations of full-year profit growth for Nutrition to 20 percent.

“We’re excited about our growth trajectory as we continue to expand our participation in large and fast-growing categories, from alternative proteins to renewable green diesel to plant-based biosolutions, with all of our strategic efforts underpinned by our unique opportunity to use ADM’s integrated value chain to advance decarbonization of the food and agriculture industries. Given our great start to the year and our expectation of continued momentum in the second half, we are confident in delivering very strong full-year earnings, and we remain well-positioned for robust, sustained growth in the years to come.”

Second Quarter 2021 Highlights

(Amounts in millions except per share amounts)	2021				2020
Earnings per share (as reported)	$	1.26			$	0.84
Adjusted earnings per share1	$	1.33			$	0.85
Segment operating profit	$	1,145			$	813
Adjusted segment operating profit1	$	1,160			$	804
Ag Services and Oilseeds	570				413
Carbohydrate Solutions	383				195
Nutrition	201				158
Other Business	6				38

• Q2 2021 EPS as reported of $1.26 includes a $0.16 per share charge related to asset impairment and non-cash pension settlement, a $0.06 per share gain related to the mark-to-market adjustment on the Wilmar exchangeable bond, and a $0.03 gain related to the sale of certain assets. Adjusted EPS, which excludes these items, was $1.33.¹

¹ Non-GAAP financial measures; see pages 5, 10, 11 and 12 for explanations and reconciliations, including after-tax amounts.

Quarterly Results of Operations

Ag Services & Oilseeds delivered operating profits almost 40 percent higher than the previous year’s quarter.

• Ag Services results were higher year over year. The North American origination business effectively managed its positions in a dynamic pricing environment, and also delivered significantly higher export volumes, driven by corn sales to China. South American origination was impacted by slower farmer selling and high commodity prices, which impacted contract fulfillment. Global trade performance was lower than the strong second quarter of 2020, with results driven partially by timing impacts that should reverse.

• Crushing had substantially higher year-over-year results. The business executed well in an environment of strong vegetable oil demand to deliver higher execution margins in North American soy and EU softseeds. Results were partially offset by weaker soybean crush margins in South America. In addition, there were approximately $70 million in net incremental negative timing effects, which should reverse in the coming quarters.

• Refined Products and Other results were significantly higher than the prior-year period, driven by continued recovery in foodservice as well as positive timing effects in North America, partially offset by impacts of the reduction in Brazilian biodiesel mandates.

• Equity earnings from Wilmar were higher year over year.

Carbohydrate Solutions results were almost double those of the prior-year period.

• Starches and Sweeteners, including ethanol production from our wet mills, delivered substantially higher year-over-year results, driven by about $90 million in positioning gains across the ethanol complex in a highly dynamic environment, as well as more normalized results from corn oil. Sweetener volumes were higher, reflecting the beginnings of a recovery in demand from the foodservice channel. Ethanol margins improved versus the prior-year period, driven by a resurgence in driving miles in the U.S.

• Vantage Corn Processors results were much higher than the second quarter of 2020, supported by the resumption of production at our two dry mills, improved fuel ethanol margins and favorable performance in USP-grade industrial alcohol from our Peoria complex.

Nutrition delivered a record Q2, with 15 percent revenue growth and 27 percent higher year-over-year profits.

• Human Nutrition revenues were 13 percent higher than the second quarter of last year on a constant currency basis, and operating profits were up 24 percent. In North America and EMEA, the flavors business delivered strong volumes and improved product mix, particularly in the beverage segment. Specialty Ingredients delivered strong sales growth in specialty proteins, though results were lower due to certain one-time costs, mainly in texturants. In Health & Wellness, stronger sales and margins in probiotics were offset by higher costs in fibers due to planned facility downtime.

• Animal Nutrition revenue was 17 percent higher year over year on a constant currency basis and profits were up 44 percent as improved demand and margins in amino acids, strength in feed additives and ingredients, and better performance in EMEA more than offset COVID-19 and labor-related impacts in other regions.

Other Business results were substantially lower than the prior-year period, driven primarily by captive insurance underwriting losses, most of which were offset by corresponding recoveries in other business segments.

Other Items of Note

As additional information to help clarify underlying business performance, the table on page 10 includes reported earnings and EPS as well as adjusted earnings and EPS.

Segment operating profit of $1.1 billion for the quarter includes charges related to asset impairment and restructuring of $37 million ($0.05 per share) and gains on sales of assets of $22 million ($0.03 per share).

In Corporate results, interest expense decreased from the prior year on lower interest rates and the favorable liability management actions taken in the prior year. Unallocated corporate costs were higher year over year due primarily to higher performance-related compensation accruals, higher IT operating and project-related costs, and transfers of costs from business segments into the centralized centers of excellence in supply chain and operations. Other income increased due primarily to a mark-to-market investment gain in the ADM Ventures portfolio. Corporate results also included a non-cash pension settlement charge of $82 million ($0.11 per share) and a gain related to the mark-to-market adjustment on the Wilmar exchangeable bond of $30 million ($0.06 per share).

The effective tax rate for the quarter was approximately 14 percent.

Note: Additional Facts and Explanations

Additional facts and explanations about results and industry environment can be found at the end of the ADM Q2 Earnings Presentation at www.adm.com/webcast.

Conference Call Information

ADM will host a webcast on July 27, 2021, at 8 a.m. Central Time to discuss financial results and provide a company update. To listen to the webcast, go to www.adm.com/webcast. A replay of the webcast will also be available for an extended period of time at www.adm.com/webcast.

Forward-Looking Statements

Some of our comments and materials in this presentation constitute forward-looking statements that reflect management’s current views and estimates of future economic circumstances, industry conditions, Company performance and financial results. These statements and materials are based on many assumptions and factors that are subject to risk and uncertainties. ADM has provided additional information in its reports on file with the SEC concerning assumptions and factors that could cause actual results to differ materially from those in this presentation, and you should carefully review the assumptions and factors in our SEC reports. To the extent permitted under applicable law, ADM assumes no obligation to update any forward-looking statements as a result of new information or future events.

About ADM

At ADM, we unlock the power of nature to provide access to nutrition worldwide. With industry-advancing innovations, a complete portfolio of ingredients and solutions to meet any taste, and a commitment to sustainability, we give customers an edge in solving the nutritional challenges of today and tomorrow. We’re a global leader in human and animal nutrition and the world’s premier agricultural origination and processing company. Our breadth, depth, insights, facilities and logistical expertise give us unparalleled capabilities to meet needs for food, beverages, health and wellness, and more. From the seed of the idea to the outcome of the solution, we enrich the quality of life the world over. Learn more at www.adm.com.

Financial Tables Follow

Source: Corporate Release

Segment Operating Profit, Adjusted Segment Operating Profit (a non-GAAP financial measure) and Corporate Results (unaudited)
	Quarter ended										Six months ended
	June 30										June 30
(In millions)	2021			2020			Change				2021			2020			Change
Segment Operating Profit	$	1,145		$	813		$	332			$	2,250		$	1,412		$	838
Specified items:
(Gains) losses on sales of assets and businesses	(22)			(23)			1				(22)			(23)			1
Impairment, restructuring, and settlement charges	37			14			23				131			58			73
Adjusted Segment Operating Profit	$	1,160		$	804		$	356			$	2,359		$	1,447		$	912
Ag Services and Oilseeds	$	570		$	413		$	157			$	1,347		$	835		$	512
Ag Services	190			171			19				399			335			64
Crushing	150			113			37				532			183			349
Refined Products and Other	130			78			52				231			159			72
Wilmar	100			51			49				185			158			27
Carbohydrate Solutions	$	383		$	195		$	188			$	642		$	263		$	379
Starches and Sweeteners	306			177			129				528			276			252
Vantage Corn Processors	77			18			59				114			(13)			127
Nutrition	$	201		$	158		$	43			$	355		$	300		$	55
Human Nutrition	162			131			31				290			244			46
Animal Nutrition	39			27			12				65			56			9
Other Business	$	6		$	38		$	(32)			$	15		$	49		$	(34)
Segment Operating Profit	$	1,145		$	813		$	332			$	2,250		$	1,412		$	838
Corporate Results	$	(320)		$	(261)		$	(59)			$	(601)		$	(485)		$	(116)
Interest expense – net	(70)			(86)			16				(134)			(163)			29
Unallocated corporate costs	(248)			(194)			(54)				(450)			(383)			(67)
Other	49			35			14				59			(17)			76
Specified items:
LIFO credit (charge)	—			—			—				—			91			(91)
Gain (loss) on debt extinguishment	—			(14)			14				—			(14)			14
Gain on debt conversion option	30			—			30				10			—			10
Impairment, restructuring, and settlement charges	(81)			(2)			(79)				(86)			1			(87)
Earnings Before Income Taxes	$	825		$	552		$	273			$	1,649		$	927		$	722

Segment operating profit is ADM’s consolidated income from operations before income tax excluding corporate items. Adjusted segment operating profit, a non-GAAP financial measure, is segment operating profit excluding specified items. Management believes that segment operating profit and adjusted segment operating profit are useful measures of ADM’s performance because they provide investors information about ADM’s business unit performance excluding corporate overhead costs as well as specified items. Segment operating profit and adjusted segment operating profit are not measures of consolidated operating results under U.S. GAAP and should not be considered alternatives to income before income taxes, the most directly comparable GAAP financial measure, or any other measure of consolidated operating results under U.S. GAAP.

Consolidated Statements of Earnings (unaudited)
	Quarter ended								Six months ended
	June 30								June 30
	2021				2020				2021				2020
	(in millions, except per share amounts)
Revenues	$	22,926			$	16,281			$	41,819			$	31,251
Cost of products sold (1)	21,463				15,173				38,808				29,192
Gross profit	1,463				1,108				3,011				2,059
Selling, general, and administrative expenses (2)	739				638				1,488				1,302
Asset impairment, exit, and restructuring costs (3)	23				16				82				57
Equity in (earnings) losses of unconsolidated affiliates	(163)				(103)				(288)				(243)
Investment income	(50)				(26)				(63)				(74)
Interest expense (4)	40				87				127				170
Other (income) expense – net (5,6,7)	49				(56)				16				(80)
Earnings before income taxes	825				552				1,649				927
Income tax expense (8)	113				80				244				64
Net earnings including noncontrolling interests	712				472				1,405				863
Less: Net earnings (losses) attributable to noncontrolling interests	—				3				4				3
Net earnings attributable to ADM	$	712			$	469			$	1,401			$	860
Diluted earnings per common share	$	1.26			$	0.84			$	2.48			$	1.53
Average diluted shares outstanding	566				562				565				563

(1) Includes a charge related to an inventory writedown of $13 million in the current quarter and YTD, and a credit related to changes in the Company’s LIFO reserves of $91 million in the prior YTD.

(2) Includes a charge related to a legal settlement of $38 million in the current YTD.

(3) Includes charges related to impairment of certain assets and restructuring of $23 million and $82 million in the current quarter and YTD, respectively, and $16 million and $57 million in the prior quarter and YTD, respectively.

(4) Includes gains related to the mark-to-market adjustment of the conversion option of the exchangeable bond issued in August 2020 of $30 million and $10 million in the current quarter and YTD, respectively.

(5) Includes gains related to the sale of certain assets of $22 million in the current quarter and YTD, and $23 million in the prior quarter and YTD. Also includes early debt repayment expenses of $14 million in the prior quarter and YTD.

(6) Includes exit costs of $2 million in the current YTD.

(7) Includes a settlement charge related to pension liabilities of $82 million in the current quarter and YTD.

(8) Includes the tax benefit impact of the above specified items and tax discrete items totaling $(24) million and $(49) million in the current quarter and YTD, respectively, and the tax expense (benefit) impact of the above specified items and certain discrete items totaling $(1) million and $19 million in the prior quarter and YTD, respectively.

Summary of Financial Condition (unaudited)
		June 30, 2021				June 30, 2020
		(in millions)
Net Investment In
Cash and cash equivalents (a)		$	869			$	1,203
Operating working capital (b)		11,628				8,540
Property, plant, and equipment		9,873				9,833
Investments in and advances to affiliates		5,113				5,239
Goodwill and other intangibles		5,266				5,212
Other non-current assets		2,202				2,046
		$	34,951			$	32,073
Financed By
Short-term debt (a)		$	1,289			$	531
Long-term debt, including current maturities (a)		8,432				8,642
Deferred liabilities		3,556				3,504
Temporary equity		71				85
Shareholders’ equity		21,603				19,311
		$	34,951			$	32,073

(a)	Net debt is calculated as short-term debt plus long-term debt (including current maturities) less cash and cash equivalents.
(b)	Current assets (excluding cash and cash equivalents) less current liabilities (excluding short-term debt and current maturities of long-term debt).

Summary of Cash Flows (unaudited)
		Six months ended
		June 30
		2021				2020
		(in millions)
Operating Activities
Net earnings		$	1,405			$	863
Depreciation and amortization		492				489
Asset impairment charges		54				47
(Gains) losses on sales/revaluation of assets		(79)				(64)
Other – net		330				276
Change in deferred consideration in securitized receivables(a)		—				(2,456)
Other changes in operating assets and liabilities		805				409
Total Operating Activities		3,007				(436)
Investing Activities
Purchases of property, plant and equipment		(427)				(360)
Net assets of businesses acquired		(5)				(3)
Proceeds from sale of business/assets		58				91
Investments in retained interest in securitized receivables(a)		—				(2,121)
Proceeds from retained interest in securitized receivables(a)		—				4,577
Marketable securities – net		1				(3)
Investments in and advances to affiliates		(8)				(5)
Other investing activities		(13)				(3)
Total Investing Activities		(394)				2,173
Financing Activities
Long-term debt borrowings		595				1,478
Long-term debt payments		(2)				(525)
Net borrowings (payments) under lines of credit		(752)				(667)
Share repurchases		—				(112)
Cash dividends		(417)				(405)
Other		—				3
Total Financing Activities		(576)				(228)
Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents		2,037				1,509
Cash, cash equivalents, restricted cash, and restricted cash equivalents – beginning of period		4,646				2,990
Cash, cash equivalents, restricted cash, and restricted cash equivalents – end of period		$	6,683			$	4,499

(a)	Cash flows related to the Company’s retained interest in securitized receivables as required by ASU 2016-15 which took effect January 1, 2018.

Segment Operating Analysis (unaudited)
	Quarter ended								Six months ended
	June 30								June 30
	2021				2020				2021				2020
	(in ‘000s metric tons)
Processed volumes (by commodity)
Oilseeds	8,778				9,103				17,738				18,266
Corn	5,042				4,099				8,692				9,633
Total processed volumes	13,820				13,202				26,430				27,899
	Quarter ended								Six months ended
	June 30								June 30
	2021				2020				2021				2020
	(in millions)
Revenues
Ag Services and Oilseeds	$	18,271			$	12,741			$	33,278			$	23,820
Carbohydrate Solutions	2,820				2,014				5,043				4,330
Nutrition	1,733				1,437				3,296				2,908
Other Business	102				89				202				193
Total revenues	$	22,926			$	16,281			$	41,819			$	31,251

Adjusted Earnings Per Share A non-GAAP financial measure (unaudited)
	Quarter ended June 30													Six months ended June 30
	2021						2020							2021						2020
	In millions			Per share			In millions			Per share				In millions			Per share			In millions			Per share
Net earnings and fully diluted EPS	$	712		$	1.26		$	469		$	0.84			$	1,401		$	2.48		$	860		$	1.53
Adjustments:
LIFO charge (credit) (a)	—			—			—			—				—			—			(69)			(0.12)
Losses (gains) on sales of assets and businesses (b)	(17)			(0.03)			(18)			(0.03)				(17)			(0.03)			(18)			(0.03)
Impairment, restructuring, and settlement charges (c)	90			0.16			12			0.02				164			0.29			44			0.08
Loss (gain) on debt extinguishment (d)	—			—			11			0.02				—			—			11			0.02
Gain on debt conversion option (e)	(30)			(0.06)			—			—				(10)			(0.02)			—			—
Tax adjustment (f)	(1)			—			1			—				(1)			—			8			0.01
Sub-total adjustments	42			0.07			6			0.01				136			0.24			(24)			(0.04)
Adjusted net earnings and adjusted EPS	$	754		$	1.33		$	475		$	0.85			$	1,537		$	2.72		$	836		$	1.49

(a)	Prior YTD changes in the Company’s LIFO reserves of $(91) million pretax ($69 million after tax), tax effected using the Company’s U.S. income tax rate.
(b)	Current quarter and YTD gain of $22 million pretax ($17 million after tax) related to the sale of certain assets, tax effected using the Company’s U.S. income tax rate. Prior quarter and YTD gain of $23 million pretax ($18 million after tax) related to the sale of certain assets, tax effected using the applicable tax rates.
(c)	Current quarter and YTD charges of $118 million and $217 million pretax, respectively, ($90 million and $164 million after tax, respectively) related to the impairment of certain assets, restructuring, and legal and pension settlements, tax effected using the applicable tax rates. Prior quarter and YTD charges of $16 million and $57 million pretax, respectively ($12 million and $44 million after tax, respectively), related to the impairment of certain assets and restructuring, tax effected using the applicable tax rates.
(d)	Prior quarter and YTD early debt repayment expenses of $14 million pretax ($11 million after tax) related to the make-whole call provisions on a bond, tax effected using the Company’s U.S. income tax rate.
(e)	Current quarter and YTD gain on debt conversion option of $30 million and $10 million pretax, respectively, ($30 million and $10 million after tax, respectively), related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020, tax effected using the applicable tax rate.
(f)	Tax adjustment due to certain discrete items totaling $1 million in the current quarter and YTD and $1 million and $8 million in the prior quarter and YTD, respectively.

Adjusted net earnings reflects ADM’s reported net earnings after removal of the effect on net earnings of specified items as more fully described above. Adjusted EPS reflects ADM’s fully diluted EPS after removal of the effect on EPS as reported of specified items as more fully described above. Management believes that Adjusted net earnings and Adjusted EPS are useful measures of ADM’s performance because they provide investors additional information about ADM’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. These non-GAAP financial measures are not intended to replace or be alternatives to net earnings and EPS as reported, the most directly comparable GAAP financial measures, or any other measures of operating results under GAAP. Earnings amounts described above have been divided by the company’s diluted shares outstanding for each respective period in order to arrive at an adjusted EPS amount for each specified item.

 

Adjusted Return on Invested Capital A non-GAAP financial measure (unaudited)
Adjusted ROIC Earnings (in millions)
																	Four Quarters
	Quarter Ended																Ended
	Sep. 30, 2020				Dec. 31, 2020				Mar. 31, 2021				June 30, 2021				June 30, 2021
Net earnings attributable to ADM	$	225			$	687			$	689			$	712			$	2,313
Adjustments:
Interest expense	100				69				87				40				296
Other adjustments	355				1				99				95				550
Total adjustments	455				70				186				135				846
Tax on adjustments	(120)				(22)				(45)				(32)				(219)
Net adjustments	335				48				141				103				627
Total Adjusted ROIC Earnings	$	560			$	735			$	830			$	815			$	2,940

Adjusted Invested Capital (in millions)
	Quarter Ended																Trailing Four
	Sep. 30, 2020				Dec. 31, 2020				Mar. 31, 2021				June 30, 2021				Quarter Average
Equity (1)	$	19,322			$	20,000			$	20,841			$	21,582			$	20,436
+ Interest-bearing liabilities (2)	8,141				9,937				11,208				9,729				9,754
Other adjustments	259				(5)				74				72				100
Total Adjusted Invested Capital	$	27,722			$	29,932			$	32,123			$	31,383			$	30,290
Adjusted Return on Invested Capital																	9.7		%

(1) Excludes noncontrolling interests

(2) Includes short-term debt, current maturities of long-term debt, finance lease obligations, and long-term debt

Adjusted ROIC is Adjusted ROIC earnings divided by adjusted invested capital. Adjusted ROIC earnings is ADM’s net earnings adjusted for the after-tax effects of interest expense and specified items. Adjusted invested capital is the sum of ADM’s equity (excluding noncontrolling interests) and interest-bearing liabilities adjusted for the after-tax effect of specified items. Management believes Adjusted ROIC is a useful financial measure because it provides investors information about ADM’s returns excluding the impacts of specified items and increases period-to-period comparability of underlying business performance. Management uses Adjusted ROIC to measure ADM’s performance by comparing Adjusted ROIC to its weighted average cost of capital (WACC). Adjusted ROIC, Adjusted ROIC earnings and Adjusted invested capital are non-GAAP financial measures and are not intended to replace or be alternatives to GAAP financial measures.

Adjusted Earnings Before Taxes, Interest, and Depreciation and Amortization (EBITDA) A non-GAAP financial measure (unaudited)   The tables below provide a reconciliation of earnings before income taxes to adjusted EBITDA and adjusted EBITDA by segment for the trailing four quarters ended June 30, 2021.
																	Four Quarters
	Quarter Ended																Ended
	Sep. 30, 2020				Dec. 31, 2020				Mar. 31, 2021				June 30, 2021				June 30, 2021
									(in millions)
Earnings before income taxes	$	200			$	756			$	824			$	825			$	2,605
Interest expense	100				69				87				40				296
Depreciation and amortization	238				249				249				243				979
Losses (gains) on sales of assets and businesses	(57)				(10)				—				(22)				(89)
Asset impairment, exit, restructuring, and settlement charges	8				27				99				118				252
Railroad maintenance expense	28				37				—				3				68
Loss (gain) on debt extinguishment	396				(1)				—				—				395
Expenses related to acquisitions	—				4				—				—				4
Adjusted EBITDA	$	913			$	1,131			$	1,259			$	1,207			$	4,510

																	Four Quarters
	Quarter Ended																Ended
	Sep. 30, 2020				Dec. 31, 2020				Mar. 31, 2021				June 30, 2021				June 30, 2021
									(in millions)
Ag Services and Oilseeds	$	527			$	926			$	871			$	661			$	2,985
Carbohydrate Solutions	323				284				342				467				1,416
Nutrition	201				185				209				253				848
Other Business	21				(14)				11				7				25
Corporate	(159)				(250)				(174)				(181)				(764)
Adjusted EBITDA	$	913			$	1,131			$	1,259			$	1,207			$	4,510

Adjusted EBITDA is defined as earnings before taxes, interest, and depreciation and amortization, adjusted for specified items. The Company calculates adjusted EBITDA by removing the impact of specified items and adding back the amounts of interest expense and depreciation and amortization to earnings before income taxes. Management believes that adjusted EBITDA is a useful measure of the Company’s performance because it provides investors additional information about the Company’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. Adjusted EBITDA is a non-GAAP financial measure and is not intended to replace or be an alternative to earnings before income taxes, the most directly comparable GAAP financial measure.

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Media Relations

Jackie Anderson

312-634-8484

Investor Relations

Vikram Luthar

312-634-8119

KEYWORDS: United States North America Illinois

INDUSTRY KEYWORDS: Supply Chain Management Retail Health Agriculture Fitness & Nutrition Natural Resources Food/Beverage

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• Forecasted to outpace the 17.6% projected growth for programmatic digital media – a $90 billion market in the U.S.
• AdTheorent operates at ‘Rule of 50’ based on 2021P revenue ex-TAC growth and adjusted EBITDA margin; projected annual revenue ex-TAC growth of 28.4% between 2020-2023 and average adjusted EBITDA margin of 30.9% between 2020-2023
• Combined company to have an implied initial enterprise value of approximately $775 million and pro forma market capitalization of approximately $1 billion, and expects to be listed on NASDAQ
• Transaction to provide a minimum of $100 million of net proceeds to AdTheorent, including a $121.5 million fully committed, oversubscribed and upsized common stock PIPE at $10.00 per share anchored by top-tier institutional and strategic investors Hana Financial Group, Palantir Technologies, and Monroe Capital and/or one or more of its affiliates
• Investor webcast and conference call is scheduled for Tuesday, July 27, at 8:00 AM ET

NEW YORK & CHICAGO–(BUSINESS WIRE)–AdTheorent, Inc., a programmatic digital advertising leader using advanced machine learning technology and solutions to deliver real-world value for advertisers and marketers, and MCAP Acquisition Corporation (NASDAQ: MACQ) (“MCAP”), a publicly-traded special purpose acquisition company, sponsored by an affiliate of Chicago-based asset manager Monroe Capital LLC, announced today that they have entered into a definitive business combination agreement in which AdTheorent will be merged with MCAP. Upon closing of the transaction, the combined company will be named AdTheorent, Inc. and it is expected to remain listed on the NASDAQ Capital Market. The transaction reflects an implied enterprise value for the company of approximately $775 million. The AdTheorent executive team, led by Chief Executive Officer Jim Lawson, will continue to execute the growth and strategy for the company. Given AdTheorent’s strong profitability and cash flow characteristics, the net cash provided by the transaction is expected to be used to support an M&A and international expansion strategy, complementing its robust organic growth profile.

“Since 2012 we have pioneered a new way to target digital ads programmatically without relying on user-specific personal profiles and individualized data,” said Jim Lawson, CEO of AdTheorent. “AdTheorent Predictive Advertising delivers a level of superior performance only possible with advanced machine learning and our privacy-forward platform is changing what digital ad targeting can be. We are excited by the opportunities this transaction represents as we work to expand our capabilities for the most sophisticated and data-driven advertisers in the world.”

“Our world class team is thrilled to have this opportunity to perform on a bigger stage,” said Lawson. “The public company structure and proceeds provided by the transaction will allow us to enhance our growth plans beyond the already robust organic growth we are delivering in 1H21 – 34% year-over-year revenue ex-TAC growth in Q1 and over 70% projected in Q2.”

Company Overview

AdTheorent’s programmatic platform uses award-winning data science and machine learning (ML) capabilities to deliver advertiser-specific business outcomes for top consumer brands. The company’s proprietary suite of tools, methodologies and vertical solutions maximizes campaign performance and ROI for advertisers, while operating in a privacy-first manner, which has quickly escalated as an essential element for brand marketers worldwide. AdTheorent’s performance focus is centered around ingesting non-personalized data signals and using statistical data for modeling and targeting, representing a growing strategic advantage as regulatory and industry changes reduce marketers’ access to individual user identifiers such as cookies and device IDs.

Operating at massive scale, AdTheorent is able to optimize ad targeting by evaluating and providing predictive scores for more than 87 billion impressions daily, bidding on less than .01% of impressions scored. The company also leverages advanced machine learning and data science to drive platform efficiencies by optimizing against ad impressions which represent a greater risk of IVT/fraud, poor viewability and brand safety, or impressions that may not be measurable by third party measurement providers.

According to the Winterberry Group, digital media spending will exceed $171 billion in the US in 2021 and is poised for exceptional growth, driven in large part by programmatic advertising. Programmatic digital spending in the US is a $90 billion Total Addressable Market (TAM) in 2021, forecasted to grow at a 17.6% CAGR to $141 billion by 2024 and AdTheorent’s industry-leading Artificial Intelligence (AI) and ML powered platform and a foundational privacy-forward approach to data and targeting position it to outpace industry growth. AdTheorent serves a diverse roster of the most sophisticated and discerning advertisers in the world across diverse and attractive industry verticals, including: Healthcare & Pharmaceuticals; Banking, Financial Services and Insurance (BFSI); Government, Education & Non-Profit; Retail; Dining & QSR; and Travel & Hospitality.

AdTheorent Investment Highlights

• Outpacing robust market growth. AdTheorent Predictive Advertising is premised on a privacy-forward technology platform and solutions which do not rely on third-party cookies and segment-based audiences for ad targeting, positioning it to benefit from increased privacy trends and meaningfully outpace peer growth, tracking toward 30% revenue growth in 2021.

• Sustainable profitability. AdTheorent has a history of operating efficiently, with consistent margin expansion the last four years, tracking toward 30% adjusted EBITDA margins in 2021.

• Strong H1 revenue growth. Revenue ex-TAC grew 34% year-over-year in 1Q21 and the company expects growth in excess of 70% in Q2, resulting in strong increases across segments for the first half of 2021.

“There has never been more demand for AdTheorent capabilities and solutions,” said Lawson. “Our platform uses machine learning and data science in unprecedented and highly differentiated ways – and our opportunities for continued innovation and advancement on this premise are vast. The future is bright for AdTheorent and our team because we created a better way for advertisers to derive provable value from their digital advertising, and we have a lot more to achieve.”

Theodore Koenig, Chairman and Chief Executive Officer of MCAP, commented, “AdTheorent’s machine learning advertising technology platform positions the company to continue to take market share in a large and rapidly growing market as consumers, regulators, and corporations alike increasingly demand advertisers shift away from outdated and less effective competitors that rely on harvesting the personal data of consumers.”

Zia Uddin, Co-President of MCAP added “The ability to deliver a superior ROI to the world’s largest brands with a product focused on privacy provides a clear path to continuing AdTheorent’s compelling combination of high growth and profitability. We are delighted to announce this business combination, which we expect to accelerate the company’s growth and create value for MCAP stockholders.”

Transaction Overview

The business combination values AdTheorent at a $775 million enterprise value and at a pro forma market capitalization of approximately $1 billion, assuming a $10.00 per share price and no redemptions by MCAP stockholders. The transaction will provide a minimum of $100 million of net proceeds to the company, including an oversubscribed and upsized $121.5 million fully committed common stock PIPE anchored by top-tier institutional and strategic investors including Hana Financial Group and Monroe Capital and/or one or more of its affiliates, along with Palantir Technologies, a global software company specializing in providing enterprise data platforms for use by organizations with complex and sensitive data environments.

The Boards of Directors of both MCAP and AdTheorent have unanimously approved the transaction. Completion of the proposed transaction is subject to approval of MCAP stockholders and other customary closing conditions, including the receipt of certain regulatory approvals. The transaction is expected to close in Q4 2021.

AdTheorent is currently majority owned by H.I.G. Growth Partners (“H.I.G.”), an affiliate of H.I.G. Capital, a leading global alternative investment firm with over $44 billion of equity capital under management. H.I.G. will continue to hold a substantial ownership position in AdTheorent.

Additional information about the proposed transaction, including a copy of the business combination agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by MCAP with the Securities and Exchange Commission and will be available at www.sec.gov.

Advisors

Canaccord Genuity acted as exclusive financial advisor to AdTheorent. Bank of America Securities, Cowen and Canaccord Genuity were engaged as PIPE placement agents. Greenberg Traurig and Nelson Mullins Riley & Scarborough are serving as legal advisors to MCAP while Paul Hastings and Kirkland & Ellis are serving as legal advisors to AdTheorent.

Investor Webcast and Conference Call

MCAP and AdTheorent will host a pre-recorded joint investor conference call to discuss the proposed transaction Tuesday July 27, 2021 at 8:00AM ET. To access the call visit http://public.viavid.com/index.php?id=146011. The recording will also be available as a webcast, which can be accessed at www.mcapacquisitioncorp.com.

About AdTheorent

AdTheorent uses advanced machine learning technology and solutions to deliver impactful advertising campaigns for marketers. AdTheorent’s industry-leading machine learning platform powers its predictive targeting, geo-intelligence, audience extension solutions and in-house creative capability, Studio A\T. Leveraging only non-sensitive data and focused on the predictive value of machine learning models, AdTheorent’s product suite and flexible transaction models allow advertisers to identify the most qualified potential consumers coupled with the optimal creative experience to deliver superior results, measured by each advertiser’s real-world business goals.

AdTheorent is consistently recognized with numerous technology, product, growth and workplace awards. AdTheorent was awarded “Best AI-Based Advertising Solution” (AI Breakthrough Awards) and “Most Innovative Product” (B.I.G. Innovation Awards) for four consecutive years. Additionally, AdTheorent is the only five-time recipient of Frost & Sullivan’s “Digital Advertising Leadership Award.” AdTheorent is headquartered in New York, with fourteen offices across the United States and Canada. For more information, visit adtheorent.com.

About MCAP Acquisition Corporation

MCAP Acquisition Corporation raised $316 million in March 2021 and its securities are listed on the NASDAQ Capital Market under the ticker symbols “MACQU,” “MACQ” and “MACQW.” MCAP is a blank check company organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, or other similar business combination with one or more businesses or entities. MCAP is sponsored by an affiliate of Monroe Capital LLC (“Monroe Capital”), a boutique asset management firm specializing in investing across various strategies, including direct lending, asset-based lending, specialty finance, opportunistic and structured credit, and equity. Monroe Capital is headquartered in Chicago and maintains offices in Atlanta, Boston, Los Angeles, Naples, New York, and San Francisco.

MCAP is the third SPAC in which Monroe has participated as a sponsor. In 2018, Monroe co-sponsored Thunder Bridge Acquisition, Ltd. and supported its successful business combination with Repay Holdings Corporation (NASDAQ: RPAY). In 2019, Monroe co-sponsored Thunder Bridge Acquisition II, Ltd. and supported its successful business combination with indie Semiconductor (NASDAQ: INDI).

MCAP is led by Chairman and Chief Executive Officer Theodore Koenig, who is President, CEO & Founder of Monroe Capital and has been the CEO and Chairman of Monroe Capital Corporation (NASDAQ: MRCC) since 2011. He is joined by Co-President Zia Uddin, who is a Partner at Monroe Capital; Co-President Mark Solovy, who serves as a Managing Director and Co-Head of the Technology Finance Group at Monroe Capital; and CFO Scott Marienau, who is the CFO of Monroe Capital’s management company.

As of July 1, 2021, Monroe Capital had approximately $10.3 billion in assets under management. Monroe Capital’s assets under management are comprised of a diverse portfolio of over 475 current investments. From Monroe Capital’s formation in 2004 through March 31, 2021, Monroe Capital’s investment professionals have invested in over 1,450 loans and related investments in an aggregate amount of $21.5 billion, including over $6.1 billion in 330 software, technology-enabled and business services companies.

To learn more please, visit www.mcapacquisitioncorp.com. The information that may be contained on or accessed through this website is not incorporated into this release.

Additional Information and Where to Find It

For additional information on the proposed transaction, see MCAP’s Current Report on Form 8-K, which will be filed concurrently with this press release. In connection with the proposed transaction, MCAP intends to file relevant materials with the Securities and Exchange Commission (the “SEC”), including a registration statement on Form S-4 with the SEC, which will include a proxy statement/prospectus of MCAP, and will file other documents regarding the proposed transaction with the SEC. MCAP’s stockholders and other interested persons are advised to read, when available, the preliminary proxy statement/prospectus and the amendments thereto and the definitive proxy statement and documents incorporated by reference therein filed in connection with the proposed business combination, as these materials will contain important information about AdTheorent, MCAP and the proposed business combination. Promptly after the Form S-4 is declared effective by the SEC, MCAP will mail the definitive proxy statement/prospectus and a proxy card to each stockholder entitled to vote at the meeting relating to the approval of the business combination and other proposals set forth in the proxy statement/prospectus. Before making any voting or investment decision, investors and stockholders of MCAP are urged to carefully read the entire registration statement and proxy statement/prospectus, when they become available, and any other relevant documents filed with the SEC, as well as any amendments or supplements to these documents, because they will contain important information about the proposed transaction. The documents filed by MCAP with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov, or by directing a request to MCAP Acquisition Corporation, 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.

Participants in the Solicitation

MCAP and its directors and executive officers may be deemed participants in the solicitation of proxies from its stockholders with respect to the business combination. A list of the names of those directors and executive officers and a description of their interests in MCAP will be included in the proxy statement/prospectus for the proposed business combination when available at www.sec.gov. Information about MCAP’s directors and executive officers and their ownership of MCAP common stock is set forth in MCAP’s prospectus, dated February 25, 2021, as modified or supplemented by any Form 3 or Form 4 filed with the SEC since the date of such filing. Other information regarding the interests of the participants in the proxy solicitation will be included in the proxy statement/prospectus pertaining to the proposed business combination when it becomes available. These documents can be obtained free of charge from the source indicated above.

AdTheorent and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the stockholders of MCAP in connection with the proposed business combination. A list of the names of such directors and executive officers and information regarding their interests in the proposed business combination will be included in the proxy statement/prospectus for the proposed business combination.

Forward Looking Statements

This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding AdTheorent’s industry and market sizes, future opportunities for AdTheorent and MCAP, AdTheorent’s estimated future results and the proposed business combination between MCAP and AdTheorent, including the implied enterprise value, the expected transaction and ownership structure and the likelihood, timing and ability of the parties to successfully consummate the proposed transaction. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.

In addition to factors previously disclosed in MCAP’s reports filed with the SEC and those identified elsewhere in this communication, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: inability to meet the closing conditions to the business combination, including the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement; the inability to complete the transactions contemplated by the definitive agreement due to the failure to obtain approval of MCAP’s stockholders; the failure to achieve the minimum amount of cash available following any redemptions by MCAP stockholders; redemptions exceeding a maximum threshold or the failure to meet The Nasdaq Stock Market’s initial listing standards in connection with the consummation of the contemplated transactions; costs related to the transactions contemplated by the definitive agreement; a delay or failure to realize the expected benefits from the proposed transaction; risks related to disruption of management’s time from ongoing business operations due to the proposed transaction; changes in the digital advertising markets in which AdTheorent competes, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in domestic and global general economic conditions; risk that AdTheorent may not be able to execute its growth strategies, including identifying and executing acquisitions; risks related to the ongoing COVID-19 pandemic and response; risk that AdTheorent may not be able to develop and maintain effective internal controls; and other risks and uncertainties indicated in MCAP’s final prospectus, dated February 25, 2021, for its initial public offering, and the proxy statement/prospectus relating to the proposed business combination, including those under “Risk Factors” therein, and in MCAP’s other filings with the SEC. AdTheorent and MCAP caution that the foregoing list of factors is not exclusive.

Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control. All information set forth herein speaks only as of the date hereof in the case of information about MCAP and AdTheorent or the date of such information in the case of information from persons other than MCAP or AdTheorent, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding AdTheorent’s industry and markets are based on sources we believe to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

Non-GAAP Financial Measures

This press release also includes certain non-GAAP financial measures that AdTheorent’s management uses to evaluate its operations, measure its performance and make strategic decisions, including Revenue ex-TAC and Adjusted EBITDA. We believe that Revenue ex-TAC and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating AdTheorent’s operating results in the same manner as management. However, Revenue ex-TAC and Adjusted EBITDA are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for revenue, net income, operating profit or any other operating performance measures calculated in accordance with GAAP.

No Offer or Solicitation

This press release shall not constitute a solicitation of a proxy, consent, or authorization with respect to any securities or in respect of the proposed business combination. This press release shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or an exemption therefrom.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210727005418/en/

For AdTheorent:

Investor Relations:

April Scee

[email protected]

Media Relations:

[email protected]

For Monroe Capital:

Investor Relations:

Theodore L. Koenig

Monroe Capital LLC

312-523-2360

[email protected]

Media Relations:

Caroline Collins

BackBay Communications

617-963-0065

[email protected]

KEYWORDS: United States North America Illinois New York

INDUSTRY KEYWORDS: Marketing Advertising Communications

MEDIA:

Posted on July 27, 2021 7:03 am

Oragenics Enters into Licensing Agreement with the National Research Council of Canada, to Pursue the Rapid Development of Next-Generation SARS-CoV-2 Vaccines

Oragenics Enters into Licensing Agreement with the National Research Council of Canada, to Pursue the Rapid Development of Next-Generation SARS-CoV-2 Vaccines

• Agreement provides Oragenics with antigen expression cell line technology capable of producing spike proteins within six to eight weeks of gene sequence definition
• Technology includes the ability to engineer vaccine antigens against SARS-CoV-2 including Wuhan, South African (beta) and other emerging variants of concern

TAMPA, Fla.–(BUSINESS WIRE)–Oragenics, Inc. (NYSE American: OGEN) today announced it has entered into a licensing agreement with the National Research Council of Canada (NRC) that will enable Oragenics to pursue the rapid development of next-generation vaccines against the SARS-CoV-2 virus and its variants. The NRC technologies, in combination with the U.S. National Institutes of Health (NIH) elements found in the Company’s Terra CoV-2 vaccine, provide Oragenics with a platform that can generate cell lines for high-yield production of spike protein antigens for existing and emerging variants of concern. This platform should allow production of cell lines within six to eight weeks of spike gene sequence availability, compared with six to nine months for traditional production of such cell lines. The NRC technologies, developed with support from the NRC’s Pandemic Response Challenge Program, will expedite the evaluation of SARS-CoV-2 antigen candidates in preclinical and clinical studies.

“Entering into this licensing agreement as well as a separate material transfer agreement with the NRC are expected to have a profound, positive impact on our company’s strategic direction and we look forward to pursuing the development of next-generation vaccines against SARS-CoV-2,” said Frederick W. Telling, Ph.D., Oragenics’ Executive Chairman. “We believe the combination of our previously licensed NIH technology with the NRC’s swift expression platform will accelerate design of new vaccine candidates that benefit from the hybrid NIH/NRC constructs. This license enables us to jumpstart IND-enabling animal studies with supplies of spike proteins to address the wild-type Wuhan virus as well as the Beta (B.1.351 or “South African”) variant that is currently of global concern among public health professionals. Preclinical studies started in June through our collaboration with the NRC. We initiated an immunogenicity study in mice to evaluate several adjuvant candidates. This study will allow for down-selection of the adjuvant candidates, with the best being advanced into a hamster challenge study to assess inhibition of viral replication and an IND-enabling GLP toxicology study.”

Dr. Telling added, “With respect to our potential future competitive positioning against currently available SARS-CoV-2 vaccines, we believe the licensed technologies will improve development speed, while the ability to rapidly engineer new vaccine antigens will permit us to quickly address new variants as they arise. In addition, our agreement with Biodextris for an intranasal adjuvant is expected to complement our intramuscular administration options and should position Oragenics with several antigen-adjuvant options in the event that SARS-CoV-2 become a seasonal flu-like disease, as many experts anticipate will be the case.”

About Oragenics, Inc.

Oragenics, Inc. is a development-stage company dedicated to fighting infectious diseases including coronaviruses and multidrug-resistant organisms. Its lead product is Terra CoV-2, a vaccine candidate to prevent COVID-19 and variants of the SARS-CoV-2 virus. The Terra CoV-2 program leverages coronavirus spike protein research licensed from the NIH and the NRC with a focus on addressing supply-chain challenges, and offering more patient-friendly administration, such as intranasal. Its lantibiotics program features a novel class of antibiotics against infectious diseases that have developed resistance to commercial antibiotics.

Forward-Looking Statements

This communication contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s beliefs and assumptions and information currently available. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project” and similar expressions that do not relate solely to historical matters identify forward-looking statements. Investors should be cautious in relying on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed in any such forward-looking statements. These factors include, but are not limited to, the following: the Company’s ability to advance the development of Terra CoV-2 and lantibiotics under the timelines and in accord with the milestones it projects; the Company’s ability to obtain funding, non-dilutive or otherwise, for the development of the vaccine product candidate, Terra CoV-2 and our lantibiotics, whether through its own cash on hand, or another alternative source; the regulatory application process, research and development stages, and future clinical data and analysis relating to Terra CoV-2 and lantibiotics, including any meetings, decisions by regulatory authorities, such as the FDA and investigational review boards, whether favorable or unfavorable; the potential application of Terra CoV-2 to variants and other coronaviruses; the Company’s ability to obtain, maintain and enforce necessary patent and other intellectual property protection; the nature of competition and development relating to COVID-19 immunization and therapeutic treatments and demand for vaccines and antibiotics; the Company’s expectations as to administration, manufacturing, storage and distribution; other potential adverse impacts due to the global COVID-19 pandemic, such as delays in regulatory review, interruptions to manufacturers and supply chains, adverse impacts on healthcare systems and disruption of the global economy; and general economic and market conditions and risks, as well as other uncertainties described in our filings with the U.S. Securities and Exchange Commission. All information set forth in this press release is as of the date hereof. You should consider these factors in evaluating the forward-looking statements included in this press release and not place undue reliance on such statements. We do not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210727005411/en/

Oragenics, Inc.

Michael Sullivan, Chief Financial Officer

813-286-7900

[email protected]

or

LHA Investor Relations

Kim Golodetz

212-838-3777

[email protected]

KEYWORDS: United States North America Canada Florida

INDUSTRY KEYWORDS: Biotechnology Infectious Diseases Health Pharmaceutical Clinical Trials

MEDIA:

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Rockwell Automation Reports Third Quarter Fiscal 2021 Results; Updates Fiscal 2021 Guidance

• Reported sales up 32.6 percent year over year; organic sales up 26.4 percent
• Record orders of over $2 billion, up double digits year over year
• Inorganic investments contributed 1.1 percent to reported sales growth
• Diluted EPS of $2.32; Adjusted EPS of $2.31
• Cash Flow from Operations of $461.5 million; Free Cash Flow conversion of 161%
• Updating fiscal 2021 sales growth guidance to ~12% and organic sales growth guidance to ~8%
• Updating fiscal 2021 Diluted EPS guidance to $12.85 – $13.05 and Adjusted EPS guidance to $9.10 – $9.30, including $(0.15) from anticipated Plex acquisition

MILWAUKEE–(BUSINESS WIRE)–
Rockwell Automation, Inc. (NYSE: ROK) today reported third quarter fiscal 2021 results.

“Rockwell delivered an outstanding quarter, with record orders and organic sales growth of 26% exceeding our expectations. These results reflect the high demand we are seeing for Rockwell’s core automation and digital transformation solutions, which provide our customers with the resiliency, agility and sustainability they need to be successful for the long term,” said Blake Moret, Chairman and CEO.

Fiscal 2021 Q3 Financial Results

Fiscal 2021 third quarter sales were $1,848.2 million, up 32.6 percent from $1,394.0 million in the third quarter of fiscal 2020. Organic sales increased 26.4 percent, currency translation increased sales by 5.1 percent, and acquisitions increased sales by 1.1 percent.

Fiscal 2021 third quarter GAAP net income attributable to Rockwell Automation was $271.3 million or $2.32 per share, compared to $317.8 million or $2.73 per share in the third quarter of fiscal 2020. The decreases in GAAP net income attributable to Rockwell Automation and Diluted EPS were primarily due to lower fair-value gains in fiscal 2021 versus fiscal 2020 in connection with our investment in PTC (the “PTC adjustments”). Fiscal 2021 third quarter Adjusted EPS was $2.31, up 75.0 percent compared to $1.32 in the third quarter of fiscal 2020, primarily driven by higher sales.

Pre-tax margin was 17.0 percent in the third quarter of fiscal 2021 compared to 24.0 percent in the same period last year. The decrease in pre-tax margin was primarily due to the PTC adjustments.

Total segment operating earnings were $368.7 million in the third quarter of fiscal 2021, up 60.7 percent from $229.4 million in the same period of fiscal 2020. Total segment operating margin was 19.9 percent compared to 16.5 percent a year ago, primarily driven by higher sales.

Cash flow provided by operating activities in the third quarter of fiscal 2021 was $461.5 million, compared to $346.2 million in the third quarter of fiscal 2020. Free cash flow in the third quarter of fiscal 2021 was $437.0 million, compared to $310.9 million in the same period last year, primarily due to higher Adjusted Income partially offset by higher income tax payments.

Fiscal Year 2021 Outlook

The COVID-19 pandemic and global efforts to respond to it continue to evolve. We are updating our guidance considering our performance through the first three quarters of the year, our expectation of continued orders strength, and anticipation of continued supply chain constraints.

The following table provides guidance for projected sales growth and earnings per share for fiscal 2021:

	Updated Guidance		Prior Guidance
Reported sales growth	~12%		9.0% – 12.0%
Organic sales growth	~8%		5.5% – 8.5%
Inorganic sales growth1	~1.5%		~1.5%
Currency translation	~2.5%		~2.0%
Diluted EPS	$12.85 – $13.05		$12.53 – $12.93
Adjusted EPS	$9.10 – $9.30		$8.95 – $9.35
Estimated impact of pending Plex acquisition2	~$(0.15)		—

1Estimate for incremental sales resulting from businesses acquired in fiscal year 2020 and Oylo and Fiix acquired in the first quarter of fiscal 2021

2 Assuming the acquisition of Plex Systems closes on August 31, 2021

“Our strong quarterly performance and raised outlook reflect our high level of execution and the organic and inorganic investments we continue to make to accelerate our strategy. As always, the foundation of our success lies in our talented, engaged employees around the world. Across all three business segments and in each functional area, the dedication to our customers’ success sets us apart,” Moret concluded.

Intelligent Devices

Intelligent Devices third quarter fiscal 2021 sales were $882.9 million, an increase of 33.8 percent compared to $659.9 million in the same period last year. Organic sales increased 28.8 percent and currency translation increased sales by 5.0 percent. Segment operating earnings were $193.6 million compared to $111.6 million in the same period last year. Segment operating margin increased to 21.9 percent from 16.9 percent a year ago, mainly due to higher sales.

Software & Control

Software & Control third quarter fiscal 2021 sales were $509.6 million, an increase of 39.7 percent compared to $364.7 million in the same period last year. Organic sales increased 31.5 percent, currency translation increased sales by 5.5 percent, and acquisitions increased sales by 2.7 percent. Segment operating earnings were $128.3 million compared to $82.1 million in the same period last year. Segment operating margin increased to 25.2 percent from 22.5 percent a year ago, driven by higher sales partially offset by higher investment spend.

Lifecycle Services

Lifecycle Services third quarter fiscal 2021 sales were $455.7 million, a increase of 23.4 percent compared to $369.4 million in the same period last year. Organic sales increased 17.2 percent, currency translation increased sales by 4.6 percent, and acquisitions increased sales by 1.6 percent. Segment operating earnings were $46.8 million compared to $35.7 million in the same period last year. Segment operating margin increased to 10.3 percent from 9.7 percent a year ago, primarily due to higher sales, partially offset by the reinstatement of incentive compensation.

Supplemental Information

Corporate and Other – Fiscal 2021 third quarter corporate and other expense was $29.2 million compared to $26.4 million in the third quarter of fiscal 2020.

Purchase Accounting Depreciation and Amortization – Fiscal 2021 third quarter purchase accounting depreciation and amortization expense was $12.9 million, up $2.3 million from the third quarter of fiscal 2020.

Tax – On a GAAP basis, the effective tax rate in the third quarter of fiscal 2021 was 14.2 percent compared to 6.1 percent in the third quarter of fiscal 2020. The higher effective tax rate in the third quarter of fiscal 2021 was primarily due to the tax effects of the fair-value adjustments recognized in fiscal 2021 and fiscal 2020 in connection with our investment in PTC, partially offset by other discrete items. The Adjusted Effective Tax Rate for the third quarter of fiscal 2021 was 14.6 percent compared to 14.1 percent in the prior year.

Share Repurchases – During the third quarter of fiscal 2021, the Company repurchased approximately 0.2 million shares of its common stock at a cost of $60.5 million. At June 30, 2021, $613.5 million remained available under our existing share repurchase authorization.

ROIC – Return on invested capital was 40.4 percent for the twelve months ended June 30, 2021.

Non-GAAP Measures – Organic sales, total segment operating earnings, total segment operating margin, Adjusted Income, Adjusted EPS, Adjusted Effective Tax Rate, free cash flow, and return on invested capital are non-GAAP measures that are reconciled to GAAP measures in the attachments to this release.

Conference Call

A conference call to discuss the quarterly results will be held at 8:30 a.m. Eastern Time on July 27, 2021. The call will be an audio webcast and accessible on the Rockwell Automation website (https://ir.rockwellautomation.com/investors/). Presentation materials will also be available on the website prior to the call.

Interested parties can access the conference call by dialing the following numbers: (833) 714-0916 in the U.S. and Canada; (778) 560-2692 for other countries. Use the following passcode: 3676006. Please dial in 10 minutes prior to the start of the call.

Both the presentation materials and a replay of the call will be available on the Investor Relations section of the Rockwell Automation website through August 27, 2021.

This news release contains statements (including certain projections, guidance, and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Words such as “believe”, “estimate”, “project”, “plan”, “expect”, “anticipate”, “will”, “intend” and other similar expressions may identify forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, many of which are beyond our control, including but not limited to:

• the severity and duration of disruptions to our business due to pandemics, including the COVID-19 pandemic, natural disasters, acts of war, strikes, terrorism, social unrest or other causes, including the impacts of the COVID-19 pandemic and efforts to manage it on the global economy, liquidity and financial markets, demand for our hardware and software products, solutions and services, our supply chain, our work force, our liquidity and the value of the assets we own;
• the availability and price of components and materials;
• macroeconomic factors, including global and regional business conditions (including adverse impacts in certain markets, such as Oil & Gas), the availability and cost of capital, commodity prices, the cyclical nature of our customers’ capital spending, sovereign debt concerns and currency exchange rates;
• the successful completion, integration, and management of strategic transactions and achievement of the expected benefits of these transactions;
• laws, regulations and governmental policies affecting our activities in the countries where we do business, including those related to tariffs, taxation, and trade controls;
• the availability, effectiveness and security of our information technology systems;
• our ability to manage and mitigate the risk related to security vulnerabilities and breaches of our hardware and software products, solutions and services;
• the successful development of advanced technologies and demand for and market acceptance of new and existing hardware and software products;
• our ability to manage and mitigate the risks associated with our solutions and services businesses;
• the successful execution of our cost productivity initiatives;
• competitive hardware and software products, solutions and services and pricing pressures, and our ability to provide high quality products, solutions and services;
• our ability to attract, develop, and retain qualified personnel;
• disruptions to our distribution channels or the failure of distributors to develop and maintain capabilities to sell our products;
• intellectual property infringement claims by others and the ability to protect our intellectual property;
• the uncertainty of claims by taxing authorities in the various jurisdictions where we do business;
• the uncertainties of litigation, including liabilities related to the safety and security of the hardware and software products, solutions and services we sell;
• risks associated with our investment in common stock of PTC Inc., including the potential for volatility in our reported quarterly earnings associated with changes in the market value of such stock;
• our ability to manage costs related to employee retirement and health care benefits; and
• other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission (SEC) filings.

Rockwell Automation, Inc. (NYSE: ROK), is a global leader in industrial automation and digital transformation. We connect the imaginations of people with the potential of technology to expand what is humanly possible, making the world more productive and more sustainable. Headquartered in Milwaukee, Wisconsin, Rockwell Automation employs approximately 24,000 problem solvers dedicated to our customers in more than 100 countries. To learn more about how we are bringing The Connected Enterprise to life across industrial enterprises, visit www.rockwellautomation.com.

ROCKWELL AUTOMATION, INC. SALES AND EARNINGS INFORMATION (in millions, except per share amounts and percentages)
		Three Months Ended June 30,								Nine Months Ended June 30,
		2021				2020				2021				2020
Sales
Intelligent Devices (a)		$	882.9			$	659.9			$	2,454.8			$	2,221.5
Software & Control (b)		509.6				364.7				1,452.9				1,265.4
Lifecycle Services (c)		455.7				369.4				1,281.9				1,272.9
Total sales (d)		$	1,848.2			$	1,394.0			$	5,189.6			$	4,759.8
Segment operating earnings
Intelligent Devices (e)		$	193.6			$	111.6			$	535.8			$	452.9
Software & Control (f)		128.3				82.1				411.2				359.3
Lifecycle Services (g)		46.8				35.7				121.1				127.8
Total segment operating earnings1 (h)		368.7				229.4				1,068.1				940.0
Purchase accounting depreciation and amortization		(12.9		)		(10.6		)		(37.7		)		(30.1		)
Corporate and other		(29.2		)		(26.4		)		(87.6		)		(76.9		)
Non-operating pension and postretirement benefit cost		(34.3		)		(8.6		)		(48.3		)		(25.9		)
Gain on investments		43.3				175.5				624.6				101.7
Legal settlement		—				—				70.0				—
Interest (expense) income, net		(22.1		)		(24.8		)		(67.2		)		(72.3		)
Income before income taxes (i)		313.5				334.5				1,521.9				836.5
Income tax provision		(44.5		)		(20.3		)		(252.2		)		(77.0		)
Net income		269.0				314.2				1,269.7				759.5
Net loss attributable to noncontrolling interests		(2.3		)		(3.6		)		(9.9		)		(1.2		)
Net income attributable to Rockwell Automation, Inc.		$	271.3			$	317.8			$	1,279.6			$	760.7
Diluted EPS		$	2.32			$	2.73			$	10.91			$	6.52
Adjusted EPS2		$	2.31			$	1.32			$	7.10			$	5.95
Average diluted shares for diluted EPS		117.0				116.4				117.1				116.5
Segment operating margin
Intelligent Devices (e/a)		21.9		%		16.9		%		21.8		%		20.4		%
Software & Control (f/b)		25.2		%		22.5		%		28.3		%		28.4		%
Lifecycle Services (g/c)		10.3		%		9.7		%		9.4		%		10.0		%
Total segment operating margin1 (h/d)		19.9		%		16.5		%		20.6		%		19.7		%
Pre-tax margin (i/d)		17.0		%		24.0		%		29.3		%		17.6		%

1Total segment operating earnings and total segment operating margin are non-GAAP financial measures. We exclude purchase accounting depreciation and amortization, corporate and other, non-operating pension and postretirement benefit cost, gains and losses on investments, the $70 million legal settlement in fiscal 2021, certain corporate initiatives, interest (expense) income – net and income tax provision because we do not consider these costs to be directly related to the operating performance of our segments. We believe total segment operating earnings and total segment operating margin are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating segments. Our measures of total segment operating earnings and total segment operating margin may be different from measures used by other companies.

2Adjusted EPS is a non-GAAP earnings measure that excludes net income (loss) attributable to noncontrolling interests, purchase accounting depreciation and amortization expense attributable to Rockwell Automation, non-operating pension and postretirement benefit cost, and gains and losses on investments, including their respective tax effects. See “Other Supplemental Information – Adjusted Income, Adjusted EPS and Adjusted Effective Tax Rate” section for more information regarding non-operating pension and postretirement benefit cost and a reconciliation to GAAP measures.

ROCKWELL AUTOMATION, INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (in millions)
		Three Months Ended June 30,								Nine Months Ended June 30,
		2021				2020				2021				2020
Sales (a)		$	1,848.2			$	1,394.0			$	5,189.6			$	4,759.8
Cost of sales		(1,083.8		)		(839.8		)		(3,011.3		)		(2,803.9		)
Gross profit (b)		764.4				554.2				2,178.3				1,955.9
Selling, general and administrative expenses (c)		(436.9		)		(370.2		)		(1,232.8		)		(1,125.4		)
Change in fair value of investments1		43.3				175.5				624.6				101.7
Other (expense) income		(34.9		)		0.4				20.1				(18.4		)
Interest expense		(22.4		)		(25.4		)		(68.3		)		(77.3		)
Income before income taxes		313.5				334.5				1,521.9				836.5
Income tax provision2		(44.5		)		(20.3		)		(252.2		)		(77.0		)
Net income		269.0				314.2				1,269.7				759.5
Net loss attributable to noncontrolling interests		(2.3		)		(3.6		)		(9.9		)		(1.2		)
Net income attributable to Rockwell Automation, Inc.		$	271.3			$	317.8			$	1,279.6			$	760.7
Gross profit as percent of sales (b/a)		41.4		%		39.8		%		42.0		%		41.1		%
SG&A as percent of sales (c/a)		23.6		%		26.6		%		23.8		%		23.6		%

1Primarily relates to the change in value of our investment in PTC.

2Income tax provision includes the tax effects on the change in value of our investment in PTC.

ROCKWELL AUTOMATION, INC. CONDENSED BALANCE SHEET INFORMATION (in millions)
		June 30, 2021				September 30, 2020
Assets
Cash and cash equivalents		$	913.8			$	704.6
Receivables		1,431.1				1,249.1
Inventories		734.4				584.0
Property, net		551.1				574.4
Operating lease right-of-use assets		338.7				342.9
Goodwill and intangibles		2,428.8				2,129.6
Long-term investments		1,589.4				953.5
Other assets		585.8				726.6
Total		$	8,573.1			$	7,264.7
Liabilities and Shareowners’ Equity
Short-term debt		$	24.6			$	24.6
Accounts payable		890.2				687.8
Long-term debt		1,977.1				1,974.7
Operating lease liabilities		268.2				274.7
Other liabilities		2,834.9				2,956.1
Shareowners’ equity attributable to Rockwell Automation, Inc.		2,269.6				1,027.8
Noncontrolling Interests		308.5				319.0
Total		$	8,573.1			$	7,264.7

ROCKWELL AUTOMATION, INC. CONDENSED CASH FLOW INFORMATION (in millions)
		Nine Months Ended June 30,
		2021				2020
Operating activities:
Net income		$	1,269.7			$	759.5
Depreciation and amortization		135.7				127.7
Change in fair value of investments1		(624.6		)		(101.7		)
Retirement benefits expense		117.8				94.9
Settlement of interest rate derivatives		—				22.0
Pension contributions		(26.7		)		(24.7		)
Receivables/inventories/payables		(82.9		)		(61.7		)
Contract liabilities		81.0				63.6
Compensation and benefits		141.6				(52.1		)
Income taxes		(8.9		)		(81.8		)
Other		54.2				49.0
Cash provided by operating activities		1,056.9				794.7
Investing activities:
Capital expenditures		(76.6		)		(91.9		)
Acquisition of businesses, net of cash acquired		(283.0		)		(545.9		)
Purchases of investments		(9.1		)		(10.7		)
Proceeds from maturities and sales of investments		0.6				43.9
Proceeds from sale of property		0.4				14.8
Other investing activities		(4.5		)		(1.3		)
Cash used for investing activities		(372.2		)		(591.1		)
Financing activities:
Issuance of debt, net of discount and issuance costs		1.4				422.7
Repayment of debt		—				(300.7		)
Cash dividends		(372.9		)		(354.3		)
Purchases of treasury stock		(238.5		)		(264.2		)
Proceeds from the exercise of stock options		122.7				187.4
Other financing activities		(15.5		)		0.8
Cash used for financing activities		(502.8		)		(308.3		)
Effect of exchange rate changes on cash		27.3				(3.9		)
Decrease in cash, cash equivalents, and restricted cash2		$	209.2			$	(108.6	)

1Primarily relates to the change in value of our investment in PTC.

2Cash and cash equivalents and restricted cash at June 30, 2021, includes $6.9 million and $18.9 million of restricted cash recorded in Other current assets and Other assets, respectively, in the Condensed balance sheet.

ROCKWELL AUTOMATION, INC.

OTHER SUPPLEMENTAL INFORMATION

(in millions)

Organic Sales

We translate sales of subsidiaries operating outside of the United States using exchange rates effective during the respective period. Therefore, changes in currency exchange rates affect our reported sales. Sales by acquired businesses also affect our reported sales. We believe that organic sales, defined as sales excluding the effects of acquisitions and changes in currency exchange rates, which is a non-GAAP financial measure, provides useful information to investors because it reflects regional and operating segment performance from the activities of our businesses without the effect of acquisitions and changes in currency exchange rates. We use organic sales as one measure to monitor and evaluate our regional and operating segment performance. When we acquire businesses, we exclude sales in the current period for which there are no comparable sales in the prior period. We determine the effect of changes in currency exchange rates by translating the respective period’s sales using the same currency exchange rates that were in effect during the prior year. When we divest a business, we exclude sales in the prior period for which there are no comparable sales in the current period. Organic sales growth is calculated by comparing organic sales to reported sales in the prior year, excluding divestitures. We attribute sales to the geographic regions based on the country of destination.

The following is a reconciliation of reported sales to organic sales for the three and nine months ended June 30, 2021, compared to sales for the three and nine months ended June 30, 2020:

		Three Months Ended June 30,
		2021																2020
		Sales				Effect of Acquisitions				Effect of Changes in Currency				Organic Sales				Sales
North America		$	1,086.7			$	(8.1	)		$	(11.5	)		$	1,067.1			$	826.0
EMEA		377.3				(7.3		)		(30.6		)		339.4				280.4
Asia Pacific		274.8				(0.3		)		(20.0		)		254.5				206.9
Latin America		109.4				(0.2		)		(7.9		)		101.3				80.7
Total		$	1,848.2			$	(15.9	)		$	(70.0	)		$	1,762.3			$	1,394.0

		Nine Months Ended June 30,
		2021																2020
		Sales				Effect of Acquisitions				Effect of Changes in Currency				Organic Sales				Sales
North America		$	3,064.7			$	(32.6	)		$	(19.2	)		$	3,012.9			$	2,855.0
EMEA		1,052.8				(44.5		)		(73.2		)		935.1				924.1
Asia Pacific		743.6				(0.6		)		(43.2		)		699.8				637.3
Latin America		328.5				(0.3		)		9.8				338.0				343.4
Total		$	5,189.6			$	(78.0	)		$	(125.8	)		$	4,985.8			$	4,759.8

The following is a reconciliation of reported sales to organic sales for our operating segments for the three and nine months ended June 30, 2021, compared to sales for the three and nine months ended June 30, 2020:

		Three Months Ended June 30, 2021
		2021																2020
		Sales				Effect of Acquisitions				Effect of Changes in Currency				Organic Sales				Sales
Intelligent Devices		$	882.9			$	—			$	(33.1	)		$	849.8			$	659.9
Software & Control		509.6				(10.0		)		(19.9		)		479.7				364.7
Lifecycle Services		455.7				(5.9		)		(17.0		)		432.8				369.4
Total		$	1,848.2			$	(15.9	)		$	(70.0	)		$	1,762.3			$	1,394.0

		Nine Months Ended June 30, 2021
		2021																2020
		Sales				Effect of Acquisitions				Effect of Changes in Currency				Organic Sales				Sales
Intelligent Devices		$	2,454.8			$	—			$	(59.5	)		$	2,395.3			$	2,221.5
Software & Control		1,452.9				(39.3		)		(36.1		)		1,377.5				1,265.4
Lifecycle Services		1,281.9				(38.7		)		(30.2		)		1,213.0				1,272.9
Total		$	5,189.6			$	(78.0	)		$	(125.8	)		$	4,985.8			$	4,759.8

The following is a reconciliation of reported sales growth to organic sales growth for the three and nine months ended June 30, 2021, compared to sales for the three and nine months ended June 30, 2020:

		Three Months Ended June 30, 2021
		Reported Sales Growth			Effect of Acquisitions			Effect of Changes in Currency			Organic Sales Growth
North America		31.6	%		1.0	%		1.4	%		29.2	%
EMEA		34.6	%		2.6	%		11.0	%		21.0	%
Asia Pacific		32.8	%		0.1	%		9.7	%		23.0	%
Latin America		35.6	%		0.2	%		9.9	%		25.5	%
Total		32.6	%		1.1	%		5.1	%		26.4	%

		Nine Months Ended June 30, 2021
		Reported Sales Growth			Effect of Acquisitions			Effect of Changes in Currency			Organic Sales Growth
North America		7.3	%		1.1	%		0.7	%		5.5	%
EMEA		13.9	%		4.8	%		7.9	%		1.2	%
Asia Pacific		16.7	%		0.1	%		6.8	%		9.8	%
Latin America		(4.3	)%		0.1	%		(2.8	)%		(1.6	)%
Total		9.0	%		1.6	%		2.7	%		4.7	%

The following is a reconciliation of reported sales growth to organic sales growth for our operating segments for the three and nine months ended June 30, 2021, compared to sales for the three and nine months ended June 30, 2020:

		Three Months Ended June 30, 2021
		Reported Sales Growth			Effect of Acquisitions			Effect of Changes in Currency			Organic Sales Growth
Intelligent Devices		33.8	%		—	%		5.0	%		28.8	%
Software & Control		39.7	%		2.7	%		5.5	%		31.5	%
Lifecycle Services		23.4	%		1.6	%		4.6	%		17.2	%
Total		32.6	%		1.1	%		5.1	%		26.4	%

		Nine Months Ended June 30, 2021
		Reported Sales Growth			Effect of Acquisitions			Effect of Changes in Currency			Organic Sales Growth
Intelligent Devices		10.5	%		—	%		2.7	%		7.8	%
Software & Control		14.8	%		3.1	%		2.8	%		8.9	%
Lifecycle Services		0.7	%		3.0	%		2.4	%		(4.7	)%
Total		9.0	%		1.6	%		2.7	%		4.7	%

ROCKWELL AUTOMATION, INC.

OTHER SUPPLEMENTAL INFORMATION

(in millions, except per share amounts and percentages)

Adjusted Income, Adjusted EPS and Adjusted Effective Tax Rate

Adjusted Income, Adjusted EPS and Adjusted Effective Tax Rate are non-GAAP earnings measures that exclude net income (loss) attributable to noncontrolling interests, purchase accounting depreciation and amortization expense attributable to Rockwell Automation, non-operating pension and postretirement benefit cost, and gains and losses on investments, including their respective tax effects.

We believe that Adjusted Income, Adjusted EPS and Adjusted Effective Tax Rate provide useful information to our investors about our operating performance and allow management and investors to compare our operating performance period over period. Adjusted EPS is also used as a financial measure of performance for our annual incentive compensation. Our measures of Adjusted Income, Adjusted EPS and Adjusted Effective Tax Rate may be different from measures used by other companies. These non-GAAP measures should not be considered a substitute for net income attributable to Rockwell Automation, diluted EPS and effective tax rate.

The following are the components of operating and non-operating pension and postretirement benefit cost (in millions):

	Three Months Ended June 30,								Nine Months Ended June 30,
	2021				2020				2021				2020
Service cost	$	23.4			$	22.9			$	69.5			$	69.0
Operating pension and postretirement benefit cost	23.4				22.9				69.5				69.0
Interest cost	31.8				34.4				95.2				103.5
Expected return on plan assets	(60.9		)		(60.9		)		(182.0		)		(183.3		)
Amortization of prior service credit	(1.1		)		(1.2		)		(3.1		)		(3.4		)
Amortization of net actuarial loss	37.3				37.1				111.4				111.4
Settlements	27.2				(0.8		)		26.8				(2.3		)
Non-operating pension and postretirement benefit cost	34.3				8.6				48.3				25.9
Net periodic pension and postretirement benefit cost	$	57.7			$	31.5			$	117.8			$	94.9

The components of net periodic pension and postretirement benefit cost other than the service cost component are included in the line “Other (expense) income” in the Statement of Operations.

The following are reconciliations of net income attributable to Rockwell Automation, diluted EPS, and effective tax rate to Adjusted Income, Adjusted EPS and Adjusted Effective Tax Rate, respectively:

	Three Months Ended June 30,								Nine Months Ended June 30,
	2021				2020				2021				2020
Net Income attributable to Rockwell Automation	$	271.3			$	317.8			$	1,279.6			$	760.7
Non-operating pension and postretirement benefit cost	34.3				8.6				48.3				25.9
Tax effect of non-operating pension and postretirement benefit cost	(8.2		)		(2.4		)		(12.2		)		(7.2		)
Change in fair value of investments1	(43.3		)		(175.5		)		(624.6		)		(101.7		)
Tax effect of the change in fair value of investments1	9.2				—				119.5				—
Purchase accounting depreciation and amortization attributable to Rockwell Automation	10.0				7.6				28.8				21.1
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation	(2.4		)		(1.8		)		(7.0		)		(5.0		)
Adjusted Income	$	270.9			$	154.3			$	832.4			$	693.8
Diluted EPS	$	2.32			$	2.73			$	10.91			$	6.52
Non-operating pension and postretirement benefit cost	0.29				0.07				0.41				0.22
Tax effect of non-operating pension and postretirement benefit cost	(0.07		)		(0.02		)		(0.10		)		(0.06		)
Change in fair value of investments1	(0.37		)		(1.51		)		(5.33		)		(0.87		)
Tax effect of the change in fair value of investments1	0.07				—				1.02				—
Purchase accounting depreciation and amortization attributable to Rockwell Automation	0.09				0.07				0.25				0.18
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation	(0.02		)		(0.02		)		(0.06		)		(0.04		)
Adjusted EPS	$	2.31			$	1.32			$	7.10			$	5.95
Effective tax rate	14.2		%		6.1		%		16.6		%		9.2		%
Tax effect of non-operating pension and postretirement benefit cost	0.9				0.5				0.2				0.5
Tax effect of the change in fair value of investments1	(0.8		)		7.0				(1.5		)		1.3
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation	0.3				0.5				0.3				0.4
Adjusted Effective Tax Rate	14.6		%		14.1		%		15.6		%		11.4		%

1Primarily relates to the change in value of our investment in PTC.

		Fiscal 2021 Guidance
Diluted EPS1		$12.85 – $13.05
Non-operating pension and postretirement benefit cost2		0.43
Tax effect of non-operating pension and postretirement benefit cost2		(0.11)
Change in fair value of investments3		(5.34)
Tax effect of change in fair value of investments3		1.02
Purchase accounting depreciation and amortization attributable to Rockwell Automation		0.33
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation		(0.08)
Adjusted EPS2		$9.10 – $9.30
Effective tax rate		~ 15.2%
Tax effect of non-operating pension and postretirement benefit cost2		~ 0.3%
Tax effect of change in fair value of investments3		~ (1.8)%
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation		~ 0.3%
Adjusted Effective Tax Rate		~ 14.0%

1Fiscal 2021 guidance based on Adjusted Income attributable to Rockwell, which includes an adjustment for Schlumberger’s non-controlling interest in Sensia.

2The settlement expense within the expected non-operating pension and postretirement benefit costs uses actual year-to-date adjustments for guidance, as estimates of settlement expenses on a forward-looking basis are not available due to variability, complexity and limited visibility of these items.

3The actual year-to-date adjustments, which are based on PTC’s share price at June 30, 2021, are used for guidance, as estimates of these adjustments on a forward-looking basis are not available due to variability, complexity and limited visibility of these items.

ROCKWELL AUTOMATION, INC.

OTHER SUPPLEMENTAL INFORMATION

(in millions, except percentages)

Free Cash Flow

Our definition of free cash flow, which is a non-GAAP financial measure, takes into consideration capital investments required to maintain the operations of our businesses and execute our strategy. In our opinion, free cash flow provides useful information to investors regarding our ability to generate cash from business operations that is available for acquisitions and other investments, service of debt principal, dividends and share repurchases. We use free cash flow, as defined, as one measure to monitor and evaluate our performance, including as a financial measure for our annual incentive compensation. Our definition of free cash flow may be different from definitions used by other companies.

The following table summarizes free cash flow by quarter:

	Quarter Ended
		Sep. 30, 2019				Dec. 31, 2019				Mar. 31, 2020				Jun. 30, 2020				Sep. 30, 20201				Dec. 31, 20202				Mar. 31, 2021				Jun. 30, 2021
Cash provided by operating activities		$	475.0			$	231.1			$	217.4			$	346.2			$	325.8			$	346.5			$	248.9			$	461.5
Capital expenditures		(24.1		)		(37.0		)		(19.6		)		(35.3		)		(22.0		)		(27.1		)		(25.0		)		(24.5		)
Free cash flow		$	450.9			$	194.1			$	197.8			$	310.9			$	303.8			$	319.4			$	223.9			$	437.0

1Includes a discretionary pre-tax contribution of $50.0 million to the Company’s U.S. pension trust.

2Includes $70.0 million pre-tax legal settlement.

The table below provides the calculation of free cash flow as a percentage of Adjusted Income (“free cash flow conversion”) for the three months ended June 30, 2020, and June 30, 2021 :

	Quarter Ended
	Jun. 30 2020					Jun. 30 2021
Free cash flow (a)	$	310.9				$	437.0
Adjusted Income (b)	154.3					270.9
Free cash flow conversion (a) / (b)	201			%		161			%

Return On Invested Capital

Our press release contains information regarding Return On Invested Capital (ROIC), which is a non-GAAP financial measure. We believe that ROIC is useful to investors as a measure of performance and of the effectiveness of the use of capital in our operations. We use ROIC as one measure to monitor and evaluate our performance. Our measure of ROIC may be different from that used by other companies. We define ROIC as the percentage resulting from the following calculation:

(a) Net Income, before interest expense, income tax provision, and purchase accounting depreciation and amortization, divided by;

(b) average invested capital for the year, calculated as a five quarter rolling average using the sum of short-term debt, long-term debt, shareowners’ equity, and accumulated amortization of goodwill and other intangible assets, minus cash and cash equivalents, short-term investments, and long-term investments (fixed income securities), multiplied by;

(c) one minus the effective tax rate for the period.

ROIC is calculated as follows (in millions, except percentages):

		Twelve Months Ended
		June 30,
		2021				2020
(a) Return
Net Income		$	1,533.4			$	767.6
Interest expense		94.5				104.3
Income tax provision		288.1				125.3
Purchase accounting depreciation and amortization		49.0				34.2
Return		1,965.0				1,031.4
(b) Average invested capital
Short-term debt		129.6				285.7
Long-term debt		1,977.0				1,959.0
Shareowners’ equity		1,803.3				924.8
Accumulated amortization of goodwill and intangibles		970.7				907.7
Cash and cash equivalents		(780.1		)		(857.0		)
Short-term and long-term investments		(0.6		)		(42.0		)
Average invested capital		4,099.9				3,178.2
(c) Effective tax rate
Income tax provision		288.1				125.3
Income before income taxes		$	1,821.5			$	892.9
Effective tax rate		15.8		%		14.0		%
(a) / (b) * (1-c) Return On Invested Capital		40.4		%		27.9		%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210727005350/en/

Marci Pelzer

Media Relations

Rockwell Automation

414.382.5679

Jessica Kourakos

Investor Relations

Rockwell Automation

414.382.8510

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